ByEric Bourne, Special to The Christian Science MonitorMay 24, 1985

Vienna
— The communist world's two most market-minded countries are struggling to square economic reform with consumer difficulties. And their respective leaders admit they have reached ``the limits of the politically tolerable.''

Neither Hungary nor Yugoslavia, however, has made any bones about forthrightly announcing that reform must continue. ``There is no other way,'' Hungarian leader Janos Kadar told his party's congress in March.

In Yugoslavia, Prime Minister Milka Planinc -- just before her official visit to the United States May 27 through June 1 -- has similarly excluded any return of the economy to an authoritarian, centralist past.

No other East-bloc country has gone anywhere near so far in this direction as Hungary and, despite any restraints implied by bloc obligations, Hungary shows no inclination to limit the practice.

Communist, but blithely independent of the Soviet bloc, Yugoslavia's economic links with the West are on a larger scale, however.

Mrs. Planinc has turned to an even closer relationship with the International Monetary Fund (IMF), of which Yugoslavia is a member, despite opposition from communist doctrinaires within the party and state leadership. This will help Yugoslavia with further Western bank credit and give it 10 years of breathing space, rather than three or four, for repayment of nearly $6 billion of debt principal now falling due.

It is the latest step in a severely austere program that rules out further borrowing for the foreseeable future and imposes rigorous application of market laws, even though this means further austerity -- which Planinc herself acknowledges has already tested public endurance enough.

Planinc is not only Yugoslavia's first woman prime minister but also the first woman to occupy so senior a position anywhere in the communist world. In her three years as prime minister, she has shown an unflagging determination and hardheaded realism in face of both economic circumstances and dogmatic critics. This should commend her in her talks in New York with US bankers and officials in Washington. (She is scheduled to meet President Reagan next Friday.)

Still, her country's inflation has approached 80 percent during the first four months of this year; unemployment stands at one of Europe's highest rates -- 15 percent; and a halt and decline in real living standards continues for most Yugoslavs.

``Nearly four decades of independence . . . prompts people to count their blessings and to put up with day-to-day worries like continuously rising prices,'' a longtime Western resident in Belgrade told this reporter this week.

Yugoslavia remains an ``open'' country -- open to unrestricted freedom of travel by its citizens and by foreign tourists. And its political and economic problems are open to public and contentious debate that is unthinkable under a communist system anywhere else.

Indeed, controversy rages between the ``liberals'' and doctrinaires over the burgeoning private sector.

Yet private enterprise in Yugoslavia has boosted necessary consumer services. It has also done something to relieve unemployment and could do even more if given the greater latitude urged by economic realists.

In Yugoslavia, public debate probes everywhere, including the most sensitive areas of political structures, the whole self-management system, and the role of the party.

Ironically, Yugoslavia's worst problems since Tito's passing have appeared in the unity and equality he gave the nation's republics and regions in an effort to lay historic enmities and rivalries to rest.

In these five years, the procedures giving individual republics a virtual power of veto, regardless of federal interests, have gotten entirely out of hand. These procedures have undermined the essential needs of central government in a multinational federation and the essence of a Yugoslav market that these groups all really need.

Things looked dark indeed at the start of the year, but the crisis atmosphere -- according to Yugoslavs who must live with it -- seems to have lifted since then. There are now no shortages of commodities like coffee -- a rarity last year -- and the markets are so well supplied with meat, vegetables, and fruit as to stagger a recent visitor from the West who was expecting the worst.

Preparing for her US trip, Planinc will doubtless have been encouraged by these few first signs of economic uplift. April apparently brought improved export performance and better productivity, which she sees to be at the heart of the economic problem.

Her term, under the Yugoslavs' rotation of top office, has another year to run. Despite her identification with austerity, Yugoslavs respect and admire her. She emerges from polls as the most popular among all senior Yugoslav leaders.

And her determination may stamp her last year in office as the most significant thus far of the whole post-Tito period.